We recently published a list of Top 10 Stocks to Buy According to Jericho Capital Asset Management. In this article, we are going to take a look at where Twilio Inc. (NYSE:TWLO) stands against other top stocks to buy according to Jericho Capital Asset Management.
Jericho Capital Asset Management, founded in 2009 by Josh Resnick, is a New York-based hedge fund manager specializing in long/short equity strategies across developed and emerging markets. Resnick established the firm with a focus on identifying market inefficiencies and capitalizing on both undervalued and overvalued securities. The investment management firm specializes in the global technology, media, and telecommunications (TMT) sectors, offering a range of financial planning, advisory, and asset management services to institutional clients and high-net-worth individuals.
As an investment advisor, Jericho Capital provides discretionary investment advisory services to pooled investment vehicles, including hedge funds and private equity funds. These funds are typically structured as master-feeder funds, where feeder funds allocate their capital to a centralized master fund managed by the firm. This structure allows investors to access a diversified portfolio while benefiting from the firm’s expertise in security selection. Given the speculative nature of its strategies, the firm cautions investors about the substantial risks involved, including the potential for significant or complete loss of capital.
Jericho Capital employs a long/short investment strategy, aiming to generate returns by purchasing undervalued securities and short-selling overvalued ones. The firm may also pursue special opportunities strategies, which can involve distinct transaction costs and pricing structures. The success of these approaches relies heavily on the firm’s ability to accurately assess market opportunities, a process that is inherently complex and subject to fluctuations. Market volatility and economic disruptions can lead to unforeseen losses, requiring the firm to make strategic adjustments to protect investor capital.
Despite the risks, Jericho Capital’s approach appeals to investors seeking alternative investment strategies with the potential for high returns. By leveraging its expertise in equity markets, the firm positions itself as a key player in the hedge fund industry. While its investment styles involve substantial risks, its track record and disciplined investment framework make it a notable choice for those willing to embrace volatility in pursuit of long-term gains.
Currently the founder and managing partner of Jericho Capital, Josh Resnick played a key role at TCS Capital before launching Jericho Capital. TCS Capital was a prominent TMT-focused hedge fund that he joined shortly after its inception in 2001. Resnick’s extensive experience in finance and investment spans multiple industries, with a focus on identifying high-growth opportunities within rapidly evolving markets. Prior to his tenure at TCS Capital, Resnick served as a Managing Director at KPE Ventures, a New York-based venture capital firm dedicated to investments in media, entertainment, and technology. His expertise in business development was further honed during his time at Fox Entertainment Group in Los Angeles, where he was part of a strategic team overseeing expansion initiatives. He began his career in investment banking at Bear Stearns, working in the media and entertainment sector, where he gained critical experience in mergers, acquisitions, and corporate finance.
Resnick holds a Bachelor of Arts degree in Economics from Emory University, where he graduated Summa Cum Laude. His academic background provided a strong foundation for his career in investment management, equipping him with analytical skills essential for navigating complex financial markets. Beyond his professional achievements, Resnick is actively involved in philanthropy. He serves on the Board of Directors of the Child Mind Institute in New York City, a nonprofit organization dedicated to supporting children with mental health and learning disorders. His commitment to both finance and social impact underscores his well-rounded leadership in the investment world.
As of its latest filing for the fourth quarter of 2024, Jericho Capital Asset Management reported managing approximately $7 billion in 13F securities. The firm maintains a moderately concentrated portfolio, with its top ten holdings making up 64.13% of total assets. This level of concentration suggests a high-conviction investment strategy, where the firm places significant emphasis on a select group of stocks it believes have strong growth potential. The firm’s investment decisions reflect its focus on the global technology, media, and telecommunications sectors, indicating confidence in the long-term growth prospects of these industries. Overall, Jericho Capital’s portfolio structure highlights its strategic focus and deep industry expertise. Its investment approach aligns with a belief in innovation-driven sectors, making it a key player in the hedge fund landscape.
Our Methodology
The stocks discussed below were picked from Jericho Capital Asset Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders as of Q4: 74
Jericho Capital Asset Management’s Equity Stake: $301.26 Million
Twilio Inc. (NYSE:TWLO) is a cloud communications company based in San Francisco, California, offering programmable communication tools for businesses to facilitate phone calls, text messaging, and other digital interactions through web service APIs. Despite strong revenue growth, Twilio’s stock dropped 15% following its fourth-quarter 2024 earnings report, mainly due to an earnings miss and cautious forward guidance. The company posted a total revenue of $1.19 billion, an 11% increase year over year, with communications revenue rising 12% to $1.12 billion. However, its non-GAAP earnings per share (EPS) of $1.00 slightly missed the consensus estimate of $1.02.
Twilio Inc. (NYSE:TWLO)’s fourth-quarter results showcased notable improvements in profitability. The company reported GAAP income from operations of $13.7 million, a significant turnaround from a $361.7 million loss in the prior year. CEO Khozema Shipchandler emphasized Twilio’s commitment to financial discipline and innovation, highlighting that the company achieved its first-ever quarter of GAAP operating profitability. Despite this progress, Twilio Inc. (NYSE:TWLO) faced financial setbacks, including $16.8 million in bad debt expenses related to Brazilian telecom provider Oi SA. Twilio’s net cash provided by operating activities was $108.4 million, with a free cash flow of $93.5 million, both significantly lower than the previous year’s figures.
To bolster shareholder value, Twilio Inc. (NYSE:TWLO)’s Board of Directors approved a $2.0 billion share repurchase program in January 2025, set to run through December 31, 2027. This follows the completion of $3.0 billion in stock buybacks under its previous program, which expired at the end of 2024. The company’s strategic focus on operational discipline and digital communication innovation positions it for long-term success, though cautious investor sentiment persists amid fluctuating earnings performance and near-term financial risks.
Twilio Inc. (NYSE:TWLO) is a recent addition to Josh Resnick’s portfolio, with the hedge fund acquiring shares for the first time in Q4 2024. Despite being a new holding, Jericho Capital Asset Management invested significantly, purchasing almost 2.8 million shares valued at over $301 million, making it the ninth most valuable position in the fund’s 13F holdings for the quarter ending in December 2024.
Overall, TWLO ranks 9th on our list of top stocks to buy according to Jericho Capital Asset Management. While we acknowledge the potential for TWLO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TWLO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
